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Judge dismisses entire Apple-Moto patent suit with prejudice

updated 11:09 pm EDT, Fri June 22, 2012

by MacNN Staff

Ruling follows tentative dismissal last week

In another surprise move, Judge Richard A. Posner has again dismissed the entirety of the patent suit consisting of claims and counterclaims from both Apple and Motorola of patent infringement, saying that both sides had failed to prove that they had been materially injured or formulate alleged damages. He had issued a tentative dismissal last week, but was persuaded to hold one last hearing to discuss possible remedies.

The 38-page ruling (available below) is rife with frustration at both sides of the battle, pointing out missteps and errors made by both companies' lawyers, as well as illustrating areas where both companies could have solidified their arguments with regards to damages. Apple was cited as having tainted an expert witness by having him rely mainly on Apple engineers for an assessment of potential damages, while Motorola's claim that its sole remaining patent was not subject to the concept of "fair, reasonable and non-discriminatory" (FRAND) licensing was viewed dubiously by the judge, who seemed to suggest that he would have dismissed Motorola's claim outright had the case gone to trial.

By dismissing both claims with prejudice, the future of any action on these patents between the two companies is left unclear, though the two companies do retain the right to appeal the ruling itself. Apple had sought a "tailored" injunction that would have forced Motorola to use at least one additional chip in its phones as a design-around for an obvious Apple patent infringement, but Posner wrote he was "not persuaded by Apple's soothing reassurance that [a customized injunction] would avert significant hardship to Motorola."

He also expressed disbelief at Motorola's claim of patent infringement, asking "how could [Motorola] be permitted to enjoin Apple from using an invention that it contends Apple must use if it wants to make a cell phone with UTMS telecommunications capability -- without which it would not be a cell phone?" He later referred to Motorola's claim against Apple as "going for broke."

The main cause of the dismissal, however, was the lack of evidence by either company that legal adjudication would actually solve the problem. Apple had resisted Posner's suggestion that some monetary award or licensing agreement from Motorola of its patents would be sufficient, and pushed for a ban or injunction to pressure Motorola to use its own technology. The Cupertino company may have overplayed its hand, with its inflexibility towards Posner's preferred solution leading to the dismissal rather than a judgement solely against Motorola's claim.

Motorola could not convince Posner that its patent claim (down from an original four claims) was valid to sue over, and could not provide evidence of harm or sales losses attributable to Apple's use. Posner referred to the problem as not having to do with the inability of the companies to calculate damages, but because neither side was willing to supply sufficient evidence "to create a triable issue."

Despite closing the case with prejudice, Posner appears to leave some doors open for further action, noting "[Apple and Motorola] can't obtain any benefit from further proceedings in this case, but they can appeal the dismissal" and earlier referring to Apple's patent claims as "still in play" though the company cannot re-file the case on the claims in question. Posner had expressed frustration earlier that both companies (and other tech firms) were being excessively litigious with regards to patent claims.

In previous comments from the bench, Posner appeared to side with Apple's main contention that tech companies should not be allowed to sue each other over patents found to be FRAND-eligible, asking Motorola how it could "have an injunction against the use of a standards-essential patent?" at one point. By the same token, the judge lambasted Apple's effort in the Motorola case, saying "no more can Apple be permitted to force a trial in federal court, the sole outcome of which would be [a token] award of $1 -- which [it doesn't want anyway]," a possible reference to the just-completed Oracle-Google trial.

The order for dismissal leaves the companies' claims in limbo, but with the distinct impression that Motorola will not be successful if it attempts to further claim non-FRAND royalty levels on its remaining patent (known as "the '898" after its patent number). Posner condemned Motorola for pursuing a 2.25 percent royalty (a figure it has proposed in multiple cases) on what he finds to be a FRAND-eligible patent as an unprovable and speculative figure. He also belittled Motorola's claim that the one patent alone was worth 40 to 50 percent of the value of the entire portfolio of 100 patents related to the one it was suing over.

The outcome in some ways is similar to the finding in the recent Apple-Samsung case in a Dutch court. In that case, Apple was found to be guilty of using a Samsung patent -- on the surface, a win for Samsung.

However, the court in that case found that the patent was eligible for FRAND licensing -- thus, while Apple will owe Samsung some royalties for its use, Samsung was shown to be abusing its rights by suing over it. No penalties or injunctions were laid upon Apple, and the company may (ironically) use the "loss" to its advantage in cases against Samsung elsewhere. In the Motorola (now owned by Google) standoff, neither company can claim a clear victory, and any paths to further litigation are at present unclear.

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